Petrol Price in Karur
Petrol price in Karur, a city in the South Indian state of Tamil Nadu, changes every day just like in other Indian cities. Due to the various components involved in petrol pricing and a new pricing mechanism adopted by Indian oil companies, petrol price in Karur fluctuates on a daily basis.
For a common man, it often becomes difficult to understand various components involved in petrol pricing in India. Mentioned below are various factors involved in petrol pricing in India and how they affect petrol prices in Karur on a daily basis.
Factors Affecting Petrol Rate in Karur
Petrol price in Karur is composed of different domestic and international elements. International factors include crude oil price in the global market and Indian rupee to US dollar exchange rate. Domestic elements include oil company’s profit margins, state government tax, central government tax and dealer’s commission.
Let’s us look at each element that affects petrol price in Karur in detail.
- Indian Crude Basket: More than 70% of India's unrefined petrol requirements are being imported from different nations. The cost of Indian crude basket, which is the cost of unrefined petrol imported by Indian oil companies, forms base price of petrol price in India.
The cost of unrefined petroleum is dynamic in nature and changes consistently depending on various elements including demand and supply metrics, climatic conditions and political stability in oil-producing nations. To calculate the current petrol price in Karur, yesterday's cost of Indian crude basket will be considered.
- Currency Exchange Rate: Crude oil trading typically happens in US dollars. Indian oil companies purchase each barrel of crude oil in US dollars. Henceforth, while calculating petroleum cost in Karur, every US dollar will be converted into Indian rupee. The fluctuating nature of US dollar thus affects petrol price in India.
- Central Government Taxes on Petrol: Indian government collects excise duty on every litre of petrol sold in the country. The tax rate remains same across all the Indian states. Currently, the excise duty on petrol in India is Rs.19.48 per litre. The latest revision was announced in February 2017, when the government reduced excise duty on Petrol and diesel by Rs.2 per litre.
- Tamil Nadu State Tax on Petrol: The state government levies value-added tax (VAT) on each litre of petrol sold in the state. Not at all the states have same VAT rate. Hence the VAT rate on petrol changes from one state to another.
Currently, Tamil Nadu State government charges a VAT of 32.06% on each litre of petrol sold in the state. Since Karur comes under the Tamil Nadu state, the same rate applies to the city of Karur.
- Profit Margins of Oil Companies: Profit margins of the Indian OMCs that include crude oil logistics charges, oil refining costs, and marketing costs do affect the petrol price in Karur. However, the change may not be on a regular basis. Whenever there is a revision in profit margins, petrol prices in the city would get affected.
- Dealer’s Commission: Petrol dealers buy petrol from oil companies and sell it in their respective petrol pumps. They add oil transportation costs from the refineries to the petrol station, pump maintenance costs, etc., in the form of dealers commission to the cost price of petrol. The dealer’s commission is usually decided by the oil companies and will be revised once every year. Hence, it will not show continuous effect on petrol price in Karur.
Components of Petrol Price in Karur, Tamil Nadu
Using the factors listed above, let’s see how the petrol rate in Karur on 11th May 2018 was calculated.
|1||International crude oil price along with ocean freight charges||$81.88 per barrel = Rs.34.38/Litre (considering $1=66.77 and 1 barrel oil = 159 litres)|
|2||Oil company’s margin, transportation, refining and freight cost||Rs.2.70/Ltr|
|5||Value added tax (VAT)||Rs.17.65/Ltr|
|Total||Retail selling price of petrol at Karur||Rs.77.81/Ltr|
Frequently Asked Questions (FAQs) on Petrol Price in Karur
- Why does Petrol Rate in Karur change every day?
- Why does Petrol Cost in Karur fluctuate from one petroleum pump to another?
- Where do I get the cheapest Petrol in Karur?
- What is the impact of GST on Karur Petrol Price?
Petrol rate in Karur changes each day as a result of the dynamic fuel pricing model. The new estimating component was introduced in India in June 2017. As per the new pricing mechanism, petrol costs in Karur will be revised each day by considering earlier day's crude oil price and currency exchange rate. The new price will be updated at all the petrol stations in Karur by 6.00 a.m. every day.
Petrol cost in Karur varies from one petrol station to another because of the difference in dealer’s commission. Since merchants commission incorporates fuel transportation expenses and fuel station upkeep costs, fuel stations located near to oil refineries charge less compared to those located far from the refineries.
Petrol cost across the city of Karur remains the same except for a few minute differences. The state-owned fuel stations such as Indian Oil, Hindustan Petroleum, and Bharat Petroleum offer the best petrol price in Karur compared to private partners like Shell and Essar. Indian Oil offers the least expensive petrol in Karur among the state-owned companies.
Ever since goods and services tax or GST has been implemented in India, there are a lot of apprehensions about how it affects petrol prices in India. While many expected that GST would drastically decrease petrol price, nothing has changed post the implementation. The reason – petrol, diesel and other fuel products are currently kept outside the purview of the new tax regime. Hence, they are being taxed as per the previous tax structure, which includes both state and central government taxes. Therefore, the effect of GST on petrol price in Karur and in other Indian cities is null for now.
*Disclaimer: BankBazaar makes no guarantee or warranty on the accuracy of the data provided on this page, the prevailing prices are susceptible to change and provided on an as-is basis. We accept no liability for any loss arising from the use of the data contained on this website.